All but one member of the Federal Open Market Committee agreed in March with the decision to increase the federal funds rate by 25 basis points to a 0.75% to 1% range, according to minutes of that meeting released Wednesday.
“Participants continued to anticipate that, with gradual adjustments in the stance of monetary policy, economic activity would expand at a moderate pace, labor market conditions would strengthen somewhat further and inflation would stabilize around 2% over the medium term,” the minutes said.
Dissenting member Neel Kashkari, president and CEO at the Federal Reserve Bank of Minneapolis, saw the move as premature until further evidence of labor market tightening and inflation came in, the minutes said.
Yet FOMC members also noted “considerable uncertainty” about potential fiscal policy changes, and several participants did not expect meaningful fiscal stimulus to start until 2018. Half of the members did not factor fiscal policy assumptions into their projections for future rate hikes, according to the minutes.
Similar to their previous meeting in February, FOMC members predicted two more hikes in 2017 and three in 2018, and the group generally considered that only gradual rate hikes in the future would be appropriate.